What's up, doc fix?

It's that time of year again — the dreaded congressional quest for billions of dollars for the “doc fix.”

Which is a bit of a misnomer, as it isn't the docs who are broken. Though if they were to actually get a 27 percent pay cut slated for Jan. 1, they could soon be broke.

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It's a foregone conclusion that Congress will avert such a deep cut — although it could take them into early next year to figure out how to undo it, and for how long.

Doc fix is Washington shorthand for the Sustainable Growth Formula, a mouthful of a payment plan wrapped into a 1997 budget law. It was supposed to be a so-smart way of linking physicians costs, Medicare enrollment and the GDP. Only it didn't work. And everyone knows it.

The irony is that this annual scramble still occurs even though pretty much everyone in Washington — Democrats, Republicans, politicians, policymakers and the medical establishment itself — have concluded that the SGR system is broken beyond repair and should be replaced.

Not only does the price tag cause a severe bout of budgetary indigestion, the payment system itself perpetuates much of what's wrong with fee for service medicine. Doctors are paid for how much they do, not how well they do it.

And to a certain extent, cutting physician payments for specific services only encourages them to offer more services. Health policy researchers don't agree on exactly how much they boost services to maintain income, or which medical specialties do the most, but the bottom line is clear: More tests. More imaging. Two doctors appointments where one used to suffice.

Until 2002, payments under the SGR formula rose modestly and doctors were happy, or at least not egregiously unhappy. Then, in 2002, doctors got an honest to goodness 4.8 percent Medicare fee cut under the formula.

But when more (and deeper) cuts were called for in later years, doctors revolted. Congress balked.

From then on, it got worse. Each year, Congress put off, canceled out, or shrank the pay cut. Doctors’ fees grew a bit, or occasionally were frozen.

That didn't solve the problem. It just made it bigger.

A few years ago, the cost of fixing SGR was around $50 billion. Now, the full cost of all those delayed cuts amounts to around $300 billion over 10 years. Double that in another five.

And that 27 percent doesn't even include the 2 percent across-the-board Medicare provider cuts that will be triggered starting in 2013 under last summer's debt deal. The supercommittee failed to avert them by finding another way to save $1.2 trillion over 10 years.

And numbers like that can create an access problem, as more doctors could stop taking Medicare patients or cut back on the number of elderly and disabled people they see.

The frantic year-end search for a solution inevitably makes it harder for Congress to wrap up whatever big tax or spending or omnibus bill that stands between it and that flight home for the holidays. This year, of course, it's the payroll tax bill — and, to the extent that it's all part of the year-end brinksmanship, the final omnibus spending bill.

The House has put in a variety of SGR pay-fors in its payroll tax bill, including cutting some health care law insurance subsidy and prevention funds, as well as some hospital outpatient payments. The Senate is toying with using war savings from the reduced U.S. role in Iraq and Afghanistan — or as Sen. Jon Kyl (R-Ariz.) put it, using one batch of "Monopoly" money to pay for another.

Neither chamber likes the other's approach, and as of now, the SGR exit strategy may well be to punt until January — letting bills from about a half-million physicians who treat Medicare patients pile up, unprocessed and unpaid, until Congress acts.